31 October 2012 | Vol. 3, № 38

From the Editor’s Desk Dear FDI supporters, This week we will release a Feature Interview with Doctor Claude Rakisits, Welcome to this week’s edition of the titled Pakistan, Afghanistan and the Strategic Weekly Analysis. Future. The interview will consider the Late last week, members of FDI attended future trajectories of both states and a reception at the home of the Japanese potential implications for Australia. Consul General. It was held in honour of Other Indian Ocean papers to be released Vice Admiral Hideaki Kaneda, JMSDF over the coming weeks include (ret.), and organised in co-operation with examinations of British, Turkish and South the Curtin University and the Department African policy in the region. of Foreign Affairs and Trade. Discussions focussed on trilateral relations between Additionally, the Energy Security Australia, Japan and the United States. programme will publish a paper exploring Vice Admiral Kaneda particularly the role of organised crime in the oil promoted maritime security co-operation sector. to meet changing power dynamics in the I trust that you will enjoy this edition of Indo-Pacific. the Strategic Weekly Analysis. Also last week, coinciding with the fiftieth anniversary of the Sino-Indian Conflict, Major General John Hartley AO (Retd) Institute Director and CEO the Indian Ocean programme released a Future Directions International Strategic Analysis Paper by FDI Visiting Fellow, Balaji Chandramohan. Exploring the likelihood of conflict between the two regional states, the paper encourages Indian policy makers to adopt a more vigorous use of realpolitik. *****

India: New Foreign Minister to Pursue Closer Relations with Pakistan and China

India’s relations with Pakistan, China and the United States will receive further attention under new External Affairs Minister , whose approach may also benefit Australia.

Background

The new Indian External Affairs Minister, Salman Khurshid, was appointed on 28 October in a Cabinet reshuffle aimed at rejuvenating a tired government ahead of the general election in 2014. He has signalled his intention to focus on improved relations with Pakistan and China.

Comment

Prime Minister Dr Manmohan Singh replaced outgoing External Affairs Minister S.M. Krishna with Law Minister Salman Khurshid in a Cabinet reshuffle following the resignation and retirement of seven ministers. The change also served to consolidate the Congress party’s position at the expense of former coalition partner the Trinamool Congress.

It was a shrewd move, as Mr Khurshid is widely respected as a charming and capable individual and a liberal at heart. His background is certainly impeccable: his grandfather, Dr Zakir Hussain, was the third and the first Muslim to hold that position. His father, Khurshed Alam Khan, also held the post of External Affairs Minister. Mr Khurshid himself is not without his own experience in the External Affairs Ministry, having held the post of Minister of State from 1993-96.

Speaking after his swearing-in ceremony, Mr Khurshid highlighted relations with Pakistan and China as priorities, having previously spoken of the need for India to normalise relations with its neighbours. He will be quickly called upon to put his ambition into practice, hosting Bangladeshi Opposition leader Khaleda Zia on 30 October and the twelfth Council of the Indian Ocean Rim Association for Regional Co-operation (IOR-ARC) Foreign Ministers on 1-2 November.

Mr Khurshid recognises the interlinked nature of Sino-Indian relations and that India has the ability, in part due to the rapport between Mr Krishna and Pakistani Foreign Minister Hina Rabbani Khar, to keep moving the Indo-Pakistani relationship forward.

As the Business Standard noted, in relations with the United States Mr Khurshid will be at ease dealing with either the Democratic Party or the Republicans, but his own liberal background may position him a little more closely to a second Obama Administration.1 Links with Washington are unlikely to cool therefore and, together with the desire for closer relations with Beijing, may bring a need for even more dextrous juggling of the two in New . Mr Khurshid’s background should also position him equally well for his dealings with

1Malhotra, J., ‘Khurshid returns 'home', has his work cut out’, Business Standard, 29 October 2012.

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Australia, as Canberra prepares to implement its Australia in the Asian Century blueprint for deeper relations with India.

Leighton G. Luke Research Manager Indian Ocean Research Programme [email protected]

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UAE to Develop Farmland in Serbia as Part of Food Security Strategy

A development contract with Serbia will assist the food security of the import-dependent Gulf state and help build its resistance to global food prices.

Background

The United Arab Emirates relies on imports to feed its population. Faced with a shortage of arable land and water, it is looking overseas to secure its food supply. A new agreement between the Emirates and Serbia aims to secure food for the former, while providing much needed agricultural investment for the latter.

Comment

The UAE has taken a further step to ensure the food security of its growing population, by investing in farmland in Eastern Europe. Abu Dhabi's Al Dahra Agricultural Company recently signed an agreement to develop 9,000 hectares of land in Serbia, with the aim of producing a range of crops, meat and dairy produce. The arrangement allows Al Dahra to export produce directly to the UAE, utilising a Serbian port on the Danube River as a logistical centre.

Domestic food production in the Emirates is not sufficient to satisfy demand. The diversification of food supplies is an active move by the government to reduce its vulnerability to food supply shocks. The UAE has the 11th largest population of the MENA region, yet is its second largest importer of food, with imports making up around 85 per cent of the total food consumed. The dependence on food imports makes the country highly susceptible to global food price increases, which constitute a large factor in the county’s food insecurity.

In return for making available agricultural land to the UAE, Serbia will benefit economically; funding from the project will go towards modernising its irrigation and canal networks. Serbia is a major producer of wheat and maize, both important components in the average Emirati diet. Agriculture accounts for around 12 per cent of Serbia’s economy, though in

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many areas it is under-resourced. Agreements such as this will allow Serbia, which in recent years has experienced negative growth and consistent budget deficits, to capitalise on its valuable land in exchange for much needed foreign investment.

According to economists at the OECD, global food prices are likely to remain relatively high until at least 2020. Countries that are dependent on food imports, therefore, must secure alternative forms of food supply that minimise the impact of price increases on its citizens. The contract between the UAE and Serbia is the second European investment made by the Emirates, both with the purpose of ensuring its future food security. The new agreement is also part of a growing worldwide trend by developed countries to exploit under-used and under-productive farmland, particularly in Central and Eastern Europe, former Soviet states and the countries of Africa.

Jay Vella Research Analyst Global Food and Water Research Programme [email protected]

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Caution Required in Woodside’s Mediterranean Jaunt

Border delineation, threats to critical infrastructure and poor regional security architecture could threaten Woodside Petroleum’s expansion in waters off the coast of Israel.

Background

As part of Woodside’s overseas growth, the Perth-based hydrocarbon producer has sought opportunities in the Leviathan field, located within Israeli waters. Security and political concerns will feature prominently in any future development plans.

Comment

In late October, as part of Woodside Petroleum’s continued off-shore focus, chief executive Peter Coleman met with Israeli Prime Minister Benjamin Netanyahu, for talks focussed on the development of the offshore Leviathan field. The West Australian-based hydrocarbon producer should, however, exercise a degree of caution. Although holding great potential, reserves in the Mediterranean may be constrained by a number of unresolved issues, including: border delineation; provision of critical infrastructure; and poor regional security architecture.

Exploration by Woodside and other hydrocarbon producers has accentuated on-going maritime disputes in the eastern Mediterranean. The land border between Israel and Lebanon was demarcated by the UN in 2000, after the withdrawal of Israeli troops from southern Lebanon. Although not officially endorsed by the UN, Israel has extended this demarcation into the sea and has deployed a series of buoys in the Mediterranean. Beirut

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strongly rejects this extension and has appealed to the UN to resolve the issue. Iran has also provided support to the Lebanese objections, with its usual rhetoric.

Elsewhere, concern also exists over potential Egyptian claims. The foreign policy intentions of Mohamed Morsi’s Government remain unclear. Poor economic outcomes may lead to declining support and an end to post-revolutionary euphoria. This may result in the government seeking to tackle emotive issues, such as Israel.

Long pipelines will be required to transport oil and gas to potential destinations in the European Union. Yet this raises significant dilemmas; Israel has no official diplomatic ties with Lebanon and its relations with Egypt have become tense. Relations with Cairo may continue to deteriorate as a more participatory political system leads to the growth of Islamist-inspired parties. Another trend is causing similar concerns; in recent years Jerusalem’s traditional ally in the region, Turkey, has shifted from support of Israel towards Lebanon and, as a matter of particular concern, Iran.

Perhaps unlikely, but never to be discounted in the Middle East, energy terrorism will also feature highly in Woodside’s concerns. Security for Woodside’s expenditure was quite probably a central theme of Mr Coleman and Prime Minister Netanyahu’s discussions. Recent media reports have suggested that the Israeli Navy is preparing an expansion programme to permit increased security patrols, with a particular focus beyond its immediate littoral. The purchase of monitoring equipment and provision of increased security patrols to ensure the security of rigs, terminals and underwater facilities, is projected to cost at least $55 million in the initial stages, rising considerably at production. The upper echelons of the military command have gone on record describing the Leviathan Basin as ’another front’.

Long-term tension in the region has created a number of flashpoints throughout the eastern Mediterranean. The continuing fallout from the ‘Arab Spring’ has dramatically increased regional tension. Since the end of the civil war, Lebanon has suffered from endemic state fragility. More recently, the on-going crisis in Syria has produced very real challenges for state security. Hezbollah continues to cause political instability and targeting Israeli developments would be in line with its previous actions. Further, reports suggest the organisation’s capability has dramatically improved since the 2006 Israel border incursion, through increased Iranian support.

Further South, pressure from more radical elements within Egypt may also prompt a more hostile policy from Cairo towards Israel. Conflict remains a remote outcome, yet opportunities for co-operation are also doubtful.

Over the coming years, offshore development may encourage extra-regional players to enter the Mediterranean. Reinforcing this possibility, in 2011 Iran sent two naval vessels through the Suez Canal and on through the Mediterranean to dock in Syria. Syria – although presently preoccupied – also has the potential to project power into the Mediterranean Sea. Regional unrest has also brought European Union naval vessels into the fray. While not necessarily aggressive in themselves, these long-term naval deployments may increase tensions and certainly could add another dimension to developments in the Mediterranean.

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As the Mediterranean transitions from a transit route to a producing hub, dialogue between all stakeholders is imperative. Oil and gas production should be considered an impetus and a valuable opportunity for pragmatic discussion, rather than yet another spoiler for regional dynamics.

Liam McHugh Research Manager Northern Australia & Energy Security Research Programmes [email protected]

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Pakistanis Protest Sunni-Shia Violence

Sunni-Shia violence continues in Pakistan amid fears that Sunni radicals are hoping to trigger sectarian clashes across the country.

Background

On 21 October 2012, Pakistanis took to the streets of Lahore to voice their anger at the killings of Shiite Muslims across the country. The protest followed the murder of a senior Shiite lawyer by an unknown gunman on 19 October. Although Shiite-Sunni violence is not a new phenomenon in Pakistan, the escalation of hostilities in the past year has sparked fears that Sunni radicals are hoping to trigger sectarian clashes, which would eventually pave the way for a pro-Sunni regime.

Comment

The recent killing of a Shiite lawyer in Lahore on 21 October, the second in less than a week, is the latest act of sectarian violence that threatens to unsettle many parts of Pakistan. Protesters are now demanding that immediate action be taken against the killers of Shiite Muslims across the country.

While sectarian violence is a long-standing problem in Pakistan, attacks on Shiites have increased in recent times. Across the country, more than 300 Shiites were killed up to September this year, Human Rights Watch reported. Sunni militants now appear to be stepping up their campaign of targeted killings.

In September, eight people were killed as gunmen attacked Shiites in Quetta, the capital of Baluchistan province. In August, four buses passing through the Pakhtunkhwa (North-West Frontier) province were ambushed by gunmen; the attackers checked the identity cards of the passengers and executed 22 Shiites. A spokesman for Tehrik-E-Taliban, the Pakistani Taliban, claimed responsibility for the killings.

The Pakistani Government has so far failed to crack down on the ethnic unrest. As Brad Adams, Human Rights Watch’s Asia director said, ‘these attacks are escalating across Pakistan … the government’s persistent failure to apprehend attackers or to prosecute

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extremist groups organising the attacks suggests that it is indifferent to the carnage.’ He went on to say, ‘Sunni militant groups, such as the ostensibly banned Lashkar-e-Jhangvi, have operated with widespread impunity across Pakistan while law enforcement officials have effectively turned a blind eye on attacks against Shia communities.’ While authorities regularly claim to be making arrests, in reality, few people have been charged or convicted over the killings.

Indeed, several radical Sunni groups have enjoyed the support of Pakistan and its intelligence service (ISI) at one point or another. The infamous Lashkar-e-Jhangyi (LeJ) group was originally supported by the ISI, but was quickly outlawed after the 11 September 2001 terrorist attacks. Since then, LeJ has worked with Sunni radical groups, al Qaida and the Pakistani Taliban in several high-profile strikes. It is believed that the group’s reach extends beyond Pakistan. Late last year, LeJ claimed responsibility for bombings in Afghanistan that killed 59 people, the worst sectarian violence seen in that country since the fall of the Taliban government in 2001.

Most analysts believe that LeJ still receives the tacit support of the Pakistani Government, which has failed to bring the group and its leaders to justice despite their involvement in a number of attacks against Shiites. For its part, the ISI has sponsored such groups in Kashmir and near the Afghan border as a means of countering India’s influence in the area, especially given the close ties now enjoys with Kabul. As one retired army general told Reuters on 24 October, ‘unfortunately, the State, for strategic reasons turned a blind eye to the LeJ for a long time … now we have a situation where it has become Pakistan’s Frankenstein.’

So far the violence has mostly been one-way. For now, the Shiites are exercising restraint, but that may change in the future. ‘We are controlling our youth and stopping them from reacting’ said Syed Sadiq Raza Taqvi, a Karachi cleric. But with each attack, the temptation to take revenge grows, along with the prospect of further sectarian clashes.

Andrew Manners Assistant Analyst Indian Ocean Research Programme

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Indonesian Counterterrorism Arrests Highlight Successes and Challenges

The recent arrest of eleven terrorist suspects demonstrates the success of Australian- Indonesian counterterrorism co-operation since the 2002 Bali bombings, while highlighting some of the challenges that lie ahead.

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Background

Following several days of raids across four provinces in late October 2012, the Indonesian National Police special counterterrorism unit Densus 88 arrested 11 men suspected of plotting a range of bomb attacks on foreign diplomatic and commercial facilities in Indonesia. Targets included offices opposite the Australian Embassy in Jakarta and head offices of US-owned multinational mining company Freeport-McMoRan, the US Embassy in Jakarta and US Consulate in East Java. The raids represent another success for Indonesia’s Australian-trained counterterrorist squad, yet also indicate that Islamist activity is continuously evolving and presenting fresh challenges for Indonesian law enforcement and society as a whole.

Comment

Indonesia has not experienced a major terrorist attack since 2009. It is believed that key terrorist groups such as Jemaah Islamiyah, the Indonesian al-Qaida affiliate responsible for the 2002 Bali bombings, have been greatly weakened by the decade-long counterterrorism campaign and have largely splintered off into a loose collective of smaller Islamist groups that generally do not enjoy the support of al-Qaida. Those arrested in the October raids are former members of the previously non-terrorist associated and self-declared non-violent Salafi organisation, HASMI (Harakah Sunni Untuk Masyarakat Indonesia or Popular Indonesia Harakah Sunni Movement), comparable to the transnational Islamist political movement Hizb ut-Tahrir. The discovery during the raids of explosive material, including nitro-glycerine, and bomb-making instructions suggests some members of HASMI have ties to more radical groups. John Della-Giacoma, a South-East Asian regional expert with the International Crisis Group, claims that as few would-be terrorists have the ability to handle nitro-glycerine, those arrested probably do have a relationship with ‘expert’ bomb technicians within the global al-Qaida network.2 The association of the arrested terror suspects with HASMI and, potentially, with transnational terrorist groups has prompted concern that Islamist groups within Indonesia may be acting as a “conveyor-belt” or pathway to terrorism.

The recent raids shows that while Densus 88 has experienced notable success over the past ten years, there is much work still to be done. Since its formation in 2003, Densus 88 has successfully apprehended over 750 suspected terrorists, including all those suspected of orchestrating the 2002 Bali bombings. Yet, police forces can only achieve so much without broader support. The government of President Susilo Bambang Yudhoyono continues to be accused of inaction and failure to counter the ‘rising tide of intolerance’ fuelling Islamist groups within the archipelago. This is perhaps due, at least in part, to a reluctance to appear ‘anti-Islamic’ in the world’s largest Muslim country. If the climate of intolerance and inter- religious antagonism continues to thrive, support for Islamist groups will continue to grow,

2 Bachelard, M., ‘Al-Qaeda link to embassy bomb plots in Jakarta’, Reuters/Sydney Morning Herald, 29 October 2012.

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while support for counterterrorism efforts will likely remain lukewarm.3 Should radicals within – or breakaways from – these groups then form connections to terrorist networks, the risk of future terrorist plots will be very likely to increase.

Fay Clarke FDI Research Assistant Indian Ocean Programme

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What’s Next?

In Wuhan, the Central Asia Regional Economic Co-operation (CAREC) summit

will conclude on 31 October. The 2012 ministerial meeting will concentrate on transport and trade policy issues. Established in 1997, the Asian Development

Bank initiative aims to foster development opportunities within the region. Member states are: Afghanistan, Azerbaijan, China, Kazakhstan, Kyrgyzstan, Mongolia, Tajikistan, Turkmenistan, Pakistan and Uzbekistan.

The 2012 African Economic Conference will continue this week. Held in Kigali, Rwanda, the annual event, in its seventh year, will discuss strategies for sustainable and inclusive growth in the context of international economic uncertainty.

Beginning 3 November, Canadian Prime Minister Stephen Harper will begin a six-day visit to India. Accompanied by several Cabinet members and a large business delegation, energy cooperation is likely to feature highly in discussions.

G20 Finance Ministers will meet over the weekend in Mexico City. According

to Mexican Deputy Finance Minister Gerardo Rodriguez Regordosa, discussions will focus on strategies to reduce economic uncertainty.

Next week, European and Asian leaders will attend the ninth Asia-Europe (ASEM) summit in Vientiane, Laos.

3 This is due not least to the refusal of Islamist groups to support government proposals aimed at curbing radicalisation, some of which are considered to infringe upon individuals’ right to freedom of religious practice. See: Jakarta Post, ‘Govt works on curbing radicalism’, 11 September 2012.

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Any opinions or views expressed in this paper are those of the individual author, unless stated to be those of Future Directions International.

Published by Future Directions International Pty Ltd. 80 Birdwood Parade, Dalkeith, WA 6009 Tel: +61 8 9389 9831 Fax: +61 8 9389 8803 E-mail: [email protected] Web: www.futuredirections.org.au

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